In an exclusive interview with ET, Murphy talks about how digital transformation is changing the search business and how the business of CEO search is changing in a disruptive world.Rica Bhattacharyya | ET Bureau | March 24, 2016, 07:55 IST

Communication skills in today’s instant world is a new must have for chief executives, says Clarke Murphy, CEO of executive search firm Russell Reynolds Associates. In an exclusive interview with Rica Bhattacharyya, Murphy talks about how digital transformation is changing the search business and how the business of CEO search is changing in a disruptive world. Edited excerpts:

What are the challenges before search firms in a volatile and disruptive business environment?

One hundred percent of the chief executives say in a volatile environment the biggest issue is people. There is a lot of capital in the world today that was not there 15 or 20 years ago. Can I find enough good people to execute the strategy that we have set out to compete or to change, is a big issue.

The first thing in a volatile world is doing more work around succession. Number two is the changing nature of the boardroom and it is about diversity of understanding of the changing customer base. If you look at the US and Europe, it is about purchasing power and your boardroom or your executive team needs to reflect that.

The last bit is shareholder activism, which you haven’t experienced in India yet, but is there in Europe, America, Japan and Australia which has created volatility for executive ranks and for the boardrooms, so the other thing that has changed for our business is we have avery large board effectiveness and board evaluation business.

In a world undergoing rapid digital transformation how is the business of search firms changing?

In-house recruiting teams have grown and the number of tools they can use has grown. Who would imagine a few years ago that 480 million people would put their background in the public domain. In the C-suite, having more data in the public DOMAIN or knowing more about companies and people’s background is the due diligence phase, but inside about what they are best at doing, things in their personality, competencies, culture fit and potential—those pieces you don’t find online.

That’s the differentiator in the changing world. Also, we are using more tools. Our industry is introducing more science into the art. We have 20 Phd organisational psychologists as partners around the globe who are part of our firm, not some third party. When we do senior-level work, we do diagnostic testing to look at nuances and personality profiles, which is not a yes/no but better understanding of traits like strategic thinking, selfconfidence, communication skills, introversion / extroversion. This mix of science and art helps lower risk for the client.

How is the business of CEO search changing in a disruptive world? What are the traits that today’s leaders are expected to display?

Operational excellence is an absolute requirement. Number two is agility to change course. Also, the ability to make decisions with limited information, to read a situation quickly and effectively to infer what’s different and make a decision.

The last thing which has come up in the last few years is superior communication. It might sound very basic, but there are many people who have the first three but are unable to articulate to their shareholders or their board or employees where they are going or why. Communication skills in today’s instant world is a new must-have for CEOs.

How is the role of the board changing in the current business environment? What challenges do boards face?

The pressures on boards in the Anglo-world has never ever been so high. If you have an underperforming division or a stock price that lags some of your competitors, you are pounced upon.

In the Anglo-world, board members are very proactive. Equally, their selection of board members to have all the pieces of insight they can, has made board selection a greater pressure. In India, post the new Companies Act, one of the things that is of huge importance is diversity of thought, which is no longer a tick box.

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